SEC's Equity Market Structure Concept Release Highlights Potential New Regulatory Initiatives

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SEC's Equity Market Structure Concept Release Highlights Potential New Regulatory Initiatives

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WilmerHale’s Investment Management Group provides sophisticated legal and regulatory advice to investment advisers, private fund sponsors, registered funds, and their independent trustees.
The Securities and Exchange Commission ("Commission" or "SEC") recently issued a concept release ("Concept Release") requesting comment on a variety of issues related to the U.S. equity markets, including the performance of the equity markets, high frequency trading ("HFT"), order routing, market data linkages, and undisplayed or "dark" liquidity. The Concept Release comes on the heels of a series of SEC rule proposals under the Securities Exchange Act of 1934 ("Exchange Act") regarding certain market practices and business models that recently have been the subjects of intense media coverage and Congressional scrutiny. Specifically, over the past five months, the SEC has proposed rules that would ban flash orders, increase certain pre- and post-trade activities of "dark pool" alternative trading systems ("ATSs") and require greater pre-trade risk management controls in sponsored access arrangements that, effectively, would ban "naked" or "unfiltered" market access. The Commission intends to use responses to the Concept Release to help assess whether market structure rules have kept pace with trading and technological developments in the equity markets more generally, and to determine whether additional regulatory measures may be needed to improve U.S. equity markets.

Read the full text of this alert, SEC’s Equity Market Structure Concept Release Highlights Potential New Regulatory Initiatives.

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